July 29, 2009In line with market-wide M&A trends, both the volume and value of Media Industry transactions dropped sharply during the 1st Half of 2009 compared with the same period last year. In addition, the ongoing user-driven transition from traditional format to new media, which the industry has had difficulty monetizing, has compounded the effect of the global economic slowdown and resulted in a more marked decline in M&A activity than was seen in other Information industries.
The most active buyers in the Media Industry, in terms of volume of transactions announced for the 1st Half of 2009, were Time Warner, Inc. and Veronis Suhler Stevenson with 4 transactions each. These include Time Warner, Inc.’s acquisitions of Going, Inc., Patch Media Corporation, Midway Games Inc. and Snowblind Studios, and Veronis Suhler Stevenson’s acquisitions of HealthCommunities.com, Inc., Voyager Learning Company, Two Tradeshows from Technology Systems Corporation and Medical Education Partnership, Ltd.
The segment with the largest transaction • volume for the 1st Half of 2009 was Internet Media with 59 transactions.
In the 1st Half of 2009, there were 40 financially sponsored transactions with an aggregate • value of $2.58 billion. These figures represent 18 percent of the total volume and 49 percent of the total value, respectively.
One bright spot in the Media Industry was the Entertainment Content segment, where aggregate transaction value grew by 10% during the 1st Half of 2009 to $612 million, from $557 million in the same period of 2008. Interestingly, this increase was due in large part to a small number of high-value game development studio acquisitions. For comparison, M&A activity in Entertainment Content has historically been dominated by Film, Television, and Music Studio transactions.
Reflecting the transition from traditional to new media, the Internet Media segment continues to generate the most M&A interest, outpacing all other media industry segments in terms of the number of transactions announced in the 1st Half of 2009.
Media companies are embracing the evolution from a “publishing” model to a multi‐channel, increasingly digitized “consumer connection” model, delivering highly targeted, relevant content when and how consumers want to receive it. Additionally, in order to meet the evolving needs of CMOs, media companies are offering a complete advertising and marketing platform that combines marketing services, metrics and analytics. Measureable results to help clients build more meaningful relationships with customers and provide essential consumer data and intelligence are essential components, and this servicebased revenue provides an important diversification for ad‐driven models.
